drgo on Nostr: The point of the vault is to not trust them. Ever wonder why all exchanges for ...
The point of the vault is to not trust them.
Ever wonder why all exchanges for anything don’t handle well under pressure? It took me a while to figure this out.
Doesn’t matter if it’s GME or bitcoin…
Exchanges make everything seem like it’s happening in real time. But it’s not. It takes time to settle a trade. During that time the exchange takes on risk, because the UI you see makes it look like the transaction already happened. If exchange sees many buy (or sell) orders, that risk can only grow so big before they have to halt trading (to one side; risk decreases if trading starts going the other way).
Ever wonder why all exchanges for anything don’t handle well under pressure? It took me a while to figure this out.
Doesn’t matter if it’s GME or bitcoin…
Exchanges make everything seem like it’s happening in real time. But it’s not. It takes time to settle a trade. During that time the exchange takes on risk, because the UI you see makes it look like the transaction already happened. If exchange sees many buy (or sell) orders, that risk can only grow so big before they have to halt trading (to one side; risk decreases if trading starts going the other way).